Boon for magnetite industry

Magnetite miners have welcomed the recommendation that the minerals resource rent tax be applied to ore before processing, making the tax burden much lower for this fledgling industry.

Magnetite is a low-grade iron ore that needs to be processed. Those planning to develop the industry in Australia argue that it needs to be exempted, as are nickel and gold.

The Policy Transition Group did not exempt magnetite mining but suggested making the point of taxation apply before processing, so the financial impact on magnetite miners is likely to be very small.

Grange Resources
managing director
Russell Clark
said that on balance the PTG’s recommendations were favourable for the industry.

“I am disappointed that magnetite has been included in the MRRT, but there is recognition that magnetite is a different industry to hematite, in that it is more capital-intensive," Mr Clark said.

The PTG’s recommendation to set the taxing point at the mine’s ore stockpile would avoid magnetite’s higher processing costs being captured in the tax, he said, and a change to the $50 million tax threshold would reduce the company’s administrative burden.

“On balance, the tax is not going to hit us much," he said.

Grange Resources operates the Savage River mine in Tasmania.

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A magnetite hopeful in Western Australia, who did not want to be named, raised concerns that the administrative burden would be high and pointed out that he would not feel confident about the future of the industry until the recommendations had been enacted.

Association of Mining and Exploration Companies chief executive officer Simon Bennison said: “Magnetite miners wanted an exclusion, which is what seems to be lacking in the PTG recommendations."

He will meet magnetite producers over coming weeks to discuss their position.